Foundations of the Rich and Athletic: What 10 Athletes Do With Their $30,000,000+ Annual Income
When you’re a world class professional athlete, you’re in high demand. When you’re the best, or nearly the best, at your particular skill in the developed world, the payoff can be huge.
For example, right now, there is no one on this planet who can compare skills with Tiger Woods. Yes, every person in this world is unique and every person is special, but Tiger is special in a way that could increase the golf industry’s revenue by a billion dollars or more. He’s special in a different way. People will come from across the globe with open wallets to see him play. When Tiger is seen drinking Gatorade, the company that manufactures Gatorade believes he will inspire the world to do as well, with open wallets.
That’s why Tiger, through his winnings and endorsements, earned approximately $128,000,000 last year alone.
There are no surprises in the top ten earning athletes:
- Tiger Woods: $22,902,706 from salary and winnings, $105,000,000 from endorsements
- Phil Mickelson: $9,372,685 from salary and winnings, $53,000,000 from endorsements
- LeBron James: $12,455,000 from salary and winnings, $28,000,000 from endorsements
- Floyd Mayweather Jr.: $20,000,000 from salary and winnings, $20,250,000 from endorsements
- Kobe Bryant: $19,490,625 from salary and winnings, $16,000,000 from endorsements
- Shaquille O’Neal: $20,000,000 from salary and winnings, $15,000,000 from endorsements
- Alex Rodriguez: $29,000,000 from salary and winnings, $6,000,000 from endorsements
- Kevin Garnett: $22,000,000 from salary and winnings, $9,000,000 from endorsements
- Peyton Manning: $17,500,000 from salary and winnings, $13,000,000 from endorsements
- Derek Jeter: $22,000,000 from salary and winnings, $8,000,000 from endorsements
So who of these mass earners have established foundations?
Tiger Woods has the Tiger Woods Foundation. The foundation established the Tiger Woods Learning Center, where children develop their character by learning how to achieve their goals and reach their dreams.
Phil Mickelson runs the Phil and Amy Mickelson Charitable Gift Fund. This charity was a strong supporter of relief efforts following Hurricane Katrina and is a continuing supporter of Homes for Our Troops.
LeBron James is part of the LeBron James Family Foundation. Recently, this foundation has been working to build playgrounds in communities across the United States.
The Floyd Mayweather Jr. Foundation was created last year. This organization seeks to use construction, entrepreneurialism and education to encourage community alliances, youth leadership and stronger families.
In 2003, Kobe Bryant closed down his Kobe Bryant Foundation amidst the athlete’s sexual assault charges. Kobe now runs the Vivo Foundation, “a charitable initiative dedicated to enhancing the lives of young people and making dreams come true through educational and cultural enrichment opportunities and financial support.”
Shaq manages his Real Model Foundation, which has been noted in the press as being an adaptation of the term “role model” but with an emphasis on the idea that role models should be real. Actual details about this foundation and the work they have done is unclear.
Alex Rodriguez and his wife Cynthia run the AROD Family Foundation. The foundation’s mission is “to positively impact families in distress by supporting programs focusing on improved quality of life, education, and mental health. The foundation supports Boys and Girls Clubs events, the Children’s Aid Society, and other organizations.
Kevin Garnett’s foundation is called “4XL – For Excellence in Leadership.” This organization “connects minority high school and college students with business leaders and internet-based guidance, while preparing them for business-related careers and entrepreneurship.” The most recent information about this organization’s activities date back to 2003.
The PeyBack Foundation, run by Peyton Manning, seeks to help disadvantage youth build futures for themselves. This foundation has a strong presence in Indiana, Tennessee, and Louisiana, and also was a significant contributor to relief effort following Hurricane Katrina.
Derek Jeter launched the Turn 2 Foundation, Inc. in 1996. The foundation has awarded more than $8 million in grants since that time. Turn 2’s mission is to “motivate young people to turn away from drugs and alcohol.”
When it comes to foundations run by athletes, Major League Baseball seems to have a great handle on the organizations run by its players. These foundations, like AROD and Turn 2, in addition to the Tiger Woods Foundation, appear to be the most professional and well-managed of all the celebrity foundations. It is surprising to see how much information was not available pertaining to the foundations run by the other athletes.
All private foundations are tax avoidance vehicles, pure and simple. The foundation head is able to shunt 30 percent of his gross income to his foundation and pay no taxes on that money. In return he only has to pay out 5 percent of that diverted money to his charity. In the case of Tiger Woods, he saved $11.52 million in taxes by diverting $38.4 million to his foundation. He still controls the rest of the foundation money and he can do pretty much what he wants to do with. The same procedures apply to every private foundation owner. Philanthropy? Forget about it.
As much as I would like to believe that all these foundations are true to their words, there is a part of me that wonders if some of these foundations are nothing more than tax shelters where the employees of the foundations are friends and relatives of the athletes.
Again, I do believe that many of these foundations are well run where a major portion of the funds “donated” actually do make to the intended purpose(s) but there has to be more financial advantages to these organizations besides good will alone.
The whole mention of Kobe Bryant made me laugh. Not a good time for time in 200 apparently. This is definitely an interesting post for sure.
Interesting roundup. It’s amazing how much some of these guys do–and not just the big names. For example, Jamie Walker, a member of the Orioles bullpen, donates $200 to the U.S. Army Emergency Relief Fund for every appearance and every strikeout during this season (and guy pitches in a LOT of games); I believe he did the same thing last year.
I’ve often wondered what athletes do with these God-awful sums of money. Now don’t get me wrong – I could spend 20 or 30 million easily improving my life, but once the house and lifestyle are built what do you do with the rest?
I know some players put too much emphasis on the big contract. Look at Carlos Zambrano. He could have gotten so much more if he’d tested the free agent waters. But he liked Chicago and he settled for probably $40 million less over his lifetime by staying there. But don’t cry for him – he still got something like $70 million. I can only imagine how much he can make in endorsements, especially around Chi-town. It’s money he won’t be able to spend in his lifetime if he has any sort or smarts and restraint.